Research Archive

On May 20, 2015, a U.S. Navy P-8A Poseidon surveillance plane flew from Clark Air Base in the Philippines to three South China Sea reefs—Subi Reef, Mischief Reef, and Fiery Cross Reef—where China has been undertaking extensive land reclamation projects in an apparent attempt to bolster its territorial claims and establish a permanent military presence in its near seas. This is just one of several actions the U.S. government has recently taken to “name and shame” China for its increasingly assertive behavior in the South China Sea. It remains to be seen whether this strategy will prompt China to reconsider its current behavior. 06/10/2015
Highlights of this month's edition: Bilateral trade: Monthly U.S. goods trade deficit with China down 15.2 percent in April on fall in U.S. imports; Bilateral policy issues: The United States indicts six Chinese citizens on charges of trade secret theft; IMF says China’s currency is no longer undervalued; Policy trends in China’s economy: China undercuts fiscal reform by reopening lending to indebted local governments; Chinese stocks volatile as exchanges rebound after dramatic falls; China’s State Council redefines China Development Bank as a “development-oriented financial institution”; Xi Jinping goes to Eurasia, Li Keqiang to Latin America, both sign multibillion dollar bilateral finance deals; Sector spotlight – Sorghum: Following a surge in U.S. sorghum exports to China, Chinese authorities are imposing stricter customs inspections, raising concerns about a possible barrier to trade. 06/03/2015
On May 26th, the Chinese government released its 10th defense white paper (DWP), entitled “China’s Military Strategy.” DWPs—China’s most authoritative statements on national security—are published by the State Council Information Office and approved by the Central Military Commission, Ministry of National Defense, and State Council. Beijing primarily uses these documents as a public relations tool to help ease deepening international concern over China’s military modernization and answer calls for greater transparency. The new DWP tracks closely with the 2012 DWP and contains no major revelations about China’s military strategy or modernization; however, it includes some new guidance and emphasizes or clarifies certain aspects of its existing strategy, providing insights into China’s perceptions of its own security and its evolving defense priorities. 06/01/2015
This paper analyzes China’s preferential trade strategy and rationale. It finds that China has signed trade agreements primarily with countries that are neither significant in the global economy nor vital to China’s export sector. Indeed, several partners enjoy bilateral trade surpluses with China, and have comparative advantages in industries that China may want to protect from outside competition. The way in which China negotiates trade deals is also confounding. Unlike the United States, China appears to lack a modus operandi, so that the scope, strength, and details of its agreements vary widely. Some appear exceedingly generous to the trade partner, while others aggressively promote and protect domestic industries. With respect to services, investment, and other advanced provisions, China tends to fall well short of U.S. standards; yet it also demonstrates greater ambition and flexibility than developing country peers like India and Brazil. 05/28/2015
Chinese businesses participating in the U.S. financial services sector can effectively operate behind a firewall that keeps them largely immune from the jurisdiction of U.S. courts and regulatory agencies, leaving U.S. partners, competitors, and investors vulnerable. Greater legal protections for U.S. entities, including requiring Chinese firms in the United States to assign a domestic agent to receive legal papers such as subpoenas and court notifications, are a possible solution to this dilemma of jurisdiction. 05/05/2015
Bilateral trade: Robust growth in imports widened the U.S. goods deficit with China despite a recovery in U.S. exports this month; Quarterly review of China’s economy: China registers slowest quarterly growth in six years; central government introduces measures to boost the economy; two major corporate defaults mark new trend in China’s slowdown; Policy trends in China’s economy: China to adopt a broadly discretionary national security review and more comprehensive guidelines for foreign investments in its four free trade zones (FTZs). 05/05/2015
Highlights of this month’s edition: • Bilateral trade: Total value of U.S. trade with China continues along a downward trend as the U.S. deficit in goods increases in 2015. • Bilateral policy issues: U.S.-China trade surplus in services increased in 2014 due to strong growth in travel sector; China underpays for U.S. intellectual property given the magnitude of its high-technology exports. • 2015 National People’s Congress Special: Government promises slower, stable growth, renews emphasis on economic reform; last year’s energy intensity and emissions reduction targets met, but public outrage over pollution continues. • Policy trends in China’s economy: The 2015 Spring Festival sees domestic consumption slow while more Chinese choose to spend holiday abroad; CCTV Consumer Rights program attacks state-owned telecom. 04/02/2015
Key Findings: China has created a regional bank among its Asian neighbors, in a move opposed by the Obama Administration; U.S. allies have sided with China despite Washington’s concerns that China might be using the bank to circumvent more established international banks, such as the World Bank and the International Monetary Fund, long dominated by the United States and Europe; China’s supporters in the effort contend that their participation in the new bank will ensure greater transparency while avoiding China’s tendency to loan money without protecting the environment, local populations, and clean governance. 03/31/2015
In this Issue: China’s Foreign Policy: Scholar proposes deeper China-Latin America integration under Maritime Silk Road initiative; leading think tank researcher predicts challenges ahead for China-led Asian Infrastructure Investment Bank. Domestic Policy Agenda: National People’s Congress delegate promotes biomass energy for inclusion in top policy-making plan. Foreign Investment: Caixin reporter expects reduced restrictions in updated foreign investment catalogue will yield limited change for China’s troubled steel industry. 03/27/2015
The U.S.-China Economic and Security Review Commission invites submission of proposals to provide a one-time unclassified report on China’s major state-directed plans and the potential opportunities and challenges they pose for the United States. Electronic or hard-copy proposals must be submitted by 5:30PM (EST) on April 16, 2015. 03/26/2015



The research papers in this section were prepared at the request of the Commission to support its deliberations. They are posted to the Commission’s website in order to promote greater public understanding of the issues addressed by the Commission in its ongoing assessment of U.S.-China economic relations and their implications for U.S. security, as mandated by P.L. 106-398 and P.L. 108-7. Their posting to the Commission’s website does not imply an endorsement by the Commission or any individual Commissioner of the views or conclusions expressed in them.